Sprint, CWA Square Off Over AT&T–T-Mobile - Broadcasting & Cable

Sprint, CWA Square Off Over AT&T–T-Mobile

McCann says filing suit against merger was to "add its expertise"; Cohen decries off-shoring jobs
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Sprint and the Communications Workers of America stayed in separate corners Friday, but still took shots at each other and at the proposed AT&T–T-Mobile merger, or in CWA's case, in defense of it.

That came in an episode of C-SPAN's Communicators series, where the two were interviewed separately.

In one corner, Vonya McCann, Sprint Nextel SVP, government affairs, said the Justice Department was spot-on in filing its antitrust suit to block the merger -- Sprint has followed suit, as it were, with its own court move to block the deal. McCann said that was not because there was not anything deficient in Justice's suit, but to add its expertise and resources to prove that the deal was illegal and would harm consumers and competition.

She said that the two former Bells would create a duopoly that could damage Sprint's business, particularly given their control over backhaul, roaming and other services on their legacy networks. As she pointed out, wireless is only wireless from the handset to the tower, which means Sprint and others have to strike deals for carriage on the wired portion of its competitors.

The U.S. District Court Judge hearing Justice suit has scheduled a hearing for Sept. 12 to set up a timetable for hearing the case, while Justice has signaled to AT&T it is open to discussions on resolving its issues.

McCann called "totally specious" arguments by CWA about the jog-creating benefits of the proposed $39 billion deal. Sprint commissioned a jobs study that concluded the deal would cost jobs. She said Sprint's study proves the basis of CWA's jobs claim is "just wrong."

When he got his turn, CWA President Larry Cohen lit into Sprint for off-shoring call center jobs -- or as he put it "contracting out every job that moves" -- and said the reason the union supported the deal was AT&T's commitments in writing to stop off-shoring those jobs, to stop T-Mobile from doing so, and to cut enough of those off-shore jobs -- primarily in Asia -- to bring 5,000 back home. He said that was a big deal in this economy.

Asked how the merger would benefit consumers, Cohen pointed to AT&T's pledge to boost rural broadband build-out, which the Obama Administration has called for and rural America needs to develop jobs there. He said that for broadband to get to rural America, it would need to be wireless, and that AT&T was pledging speeds of 10 Mbps downstream, CWA's definition of high-speed.

Invoking the home state of Sen. Commerce Committee Chairman Jay Rockefeller, Cohen pointed out that it has "almost nothing" in terms of high-speed wireless and that AT&T commitments to wireless rollout would be "critical for consumers" there and elsewhere. He also said it was up to the FCC to put conditions on the deal relative to price or build-outs, and to enforce and monitor them.

While McCann said Justice had gotten it right, Cohen suggested it had missed the mark by a country mile. First, he said, by looking at the deal as competition for voice, rather than data. Justice said it was confining the relevant market two four principle companies, Verizon, AT&T, Sprint and T-Mobile. But Cohen said that does not take into account Microsoft, which competes for callers via Skype, other over-the-top data and voice players Apple and Google, or Clearwire and LightSquared.

"They got the industry wrong," he said of Justice. He also pointed to the regional competitors that Justice said were qualitatively different. Cohen argues there are at least six or seven competitors in each market providing price and service competition.

And while McCann would not comment on whether Sprint was interested in buying T-Mobile, Cohen said they had been in the midst of trying to do that deal and Sprint was playing the part of something of a jilted suitor.

Asked about the politics of a union supporting a deal being challenged by many congressional Democrats and the Obama Justice department, he said he recognized that, but that the administration had been talking rural broadband and jobs, and that was what this deal was about.

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